STR, TE downgrade U.S. hotel forecast

NEW YORK – STR and Tourism Economics made significant downward adjustments to the 2024-25 U.S. hotel forecast just released at the 46th Annual NYU International Hospitality Industry Investment Conference. The latest revision reflects lower-than-expected performance thus far in 2024 as well as lessened growth projections for the remainder of the year.

For 2024, projected gains in average daily rate (ADR) and revenue per available room (RevPAR) were downgraded 1.0 percentage points and 2.1 ppts, respectively. Occupancy for the year is now expected to decline after the previous forecast projected year-over-year growth in the metric. For 2025, an occupancy growth projection was kept in place, but downward adjustments were once again made to ADR (-0.8 ppts) and RevPAR (-0.9 ppts).

“We have seen a bifurcation in hotel performance over the first four months of the year, which we don’t believe will abate soon,” said Amanda Hite, STR president. “The increased cost of living is affecting lower-to-middle income households and their ability to travel, thus lessening demand for hotels in the lower price tier. The Upscale through Luxury tier is seeing healthy demand, but pricing power has waned given changes in mix and travel patterns and to a lesser extent, economic conditions. Travel remains a priority for most Americans, but the volume has lessened as prices on goods and services continue to rise.”

To read the article at STR, click here.